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CRL.A NO.405 OF 2018 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF MAY, 2024
BEFORE
THE HON'BLE MS.JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.405 OF 2018
BETWEEN:
SRI. P R SARVESHWAR REDDY S/O REDDAPPA REDDY, AGED ABOUT 58 YEARS, R/AT NO.39/15, 7TH MAIN ROAD, GANESHA BLOCK, MAHALAKSHMI LAYOUT, BENGALURU - 560 073
……APPELLANT (BY SRI. PRAVEEN C P, ADVOCATE)
AND:
SRI A SOMASHEKAR REDDY S/O DASAREDDIGARI ANJANEYA REDDY, RESIDING AT NO.635, 9TH CROSS ROAD, 3RD BLOCK, HMT LAYOUT, NAGASANDRA POST, BENGALURU - 560 073 …….RESPONDENT (BY SRI. D.NAGARAJA REDDY, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT DATED 01.01.2018 PASSED BY THE LEARNED LXII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE (CCH-63), BENGALURU IN CRL.A.NO.464/2016 AND CONFIRM THE JUDGMENT DATED 15.03.2016 PASSED BY THE LEARNED XIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BANGALORE IN C.C.NO.2836/2014 FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, BY ALLOWING THIS APPEAL IN THE INTEREST OF JUSTICE AND EQUITY.
CRL.A NO.405 OF 2018 2
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON 04.03.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT DELIVERED THE FOLLOWING:
J U D G M E N T
This appeal filed under Section 378 (4) of Cr.P.C is by the complainant challenging acquittal of respondent/accused, by the Sessions Court by reversing the conviction imposed by the trial Court, for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short ‘N.I. Act’).
For the sake of convenience, parties are referred to by their rank before the trial Court.
Complainant filed the complaint under Section 200 of Cr.P.C against the accused alleging that he and accused are known to each other since long time as a good friends. In order to meet his financial crisis in the business and for construction of house, during April 2013 accused approached the complainant for financial assistance of Rs.7.5 lakhs as hand loan. He promised to repay the same within 10 days. Complainant being a good
CRL.A NO.405 OF 2018 3 friend paid a sum of Rs.7.5 lakhs to the accused in the first week of May 2013 in cash and accused acknowledge the same. After lapse of 10 days, complainant requested the accused to return the money. Accused pleaded his inability and requested for two more days and issued post dated 15.05.2013 cheque with an assurance of encashment on presentation. Accordingly complainant presented the cheque through his banker. To his shock and surprise, it was returned dishonoured on 24.05.2013 for reason “Account is dormant’’. In this regard he got issued legal notice dated 31.05.2013 through RPAD. It is duly served on the accused. Iinstead of paying the amount due, the accused has sent an evasive reply dated 14.06.2013. Without any alternative complaint is filed.
Accused appeared before the trial Court and contested the case by pleading not guilty.
In order to prove the allegations against accused, complainant has examined himself as PW-1 and relied upon Ex.P1 to 14.
CRL.A NO.405 OF 2018 4 6. During the course of his statement under Section 313 Cr.P.C, the accused has denied the incriminating evidence led by the complainant.
In fact, accused has stepped into the witness box and examined himself as DW-1. He has relied upon Ex.D1 to 9.
The trial Court accepted the contention of the complainant and convicted the accused.
Accused challenged the same before the Session Court.
Vide the impugned judgment and order, the Sessions Court has allowed the appeal, set aside the order of conviction passed by the trial Court and acquitted the accused.
Aggrieved by the same, complainant is before this Court contending that judgment and order are illegal, unlawful, unreasonable and without application of judicial mind. The learned Sessions Judge has failed to appreciate
CRL.A NO.405 OF 2018 5 that the complainant has proved the allegations against accused and he is having a very good case on merit. It has failed to appreciate the oral and documentary evidence placed on record in right perspective. All the essential ingredients under Section 138 of N.I Act are complied with by the complainant. The accused has failed to rebut the presumption under Section 139 of N.I Act. In the light of the presumption and also the oral and documentary evidence placed on record, the complainant has proved the allegations against accused.
11.1 The trial Court has convicted accused, appreciating the oral and documentary evidence placed on record. However, the Sessions Court is not justified in interfering with the well reasoned judgment and order of the trial Court. Viewed from any angle, the impugned judgment and order are not tenable and pray to allow the appeal, set aside the judgment and order of the Sessions Court and restore the judgment and order of the trial Court.
CRL.A NO.405 OF 2018 6 12. On the other hand, learned counsel for accused has supported the impugned judgment and order and sought for dismissal of the appeal. He would submit that one Doreswami Reddy was a close relative of complainant i.e the brother of complainant had married the daughter of Peddappa Reddy - the son of the Doreswami Reddy. Doreswami Reddy and Peddappa Reddy were having fleet of lorries. Complainant purchased a second hand lorry from Peddappa Reddy for Rs.1,40,000/- and issued two blank signed cheques. He paid Rs.1,00,000/-. Before he could pay the balance, the lorry met with an accident and therefore Peddappa Reddy exempted him from paying the balance, but went on postponing returning the blank cheques. After the death of Peddappa Reddy, misusing one such cheque, complainant has filed this complaint and through his brother-in-law filed another complaint utilising the second cheque. Through the oral and documentary evidence placed on record, the accused has proved his defence. On the other hand, the complainant has failed to prove allegations against accused, including his financial capacity to lend Rs.7.5 lakhs to the accused. Appreciating
CRL.A NO.405 OF 2018 7 the oral and documentary evidence placed on record rightly the Sessions Court has set aside the conviction imposed by the trial Court and pray to dismiss the appeal also. 13. In support of his arguments, learned counsel for accused has relied upon the following decisions:
(i) C. Antony Vs. K.G.Raghavan Nair (C.Antony)1
(ii) John K. John Vs. Tom Varghese and Anr. (John K. John)2
(iii) Sanjay Mishra Vs. Kanishka Kappor @ Nikki (Sanjay Mishra)3
(iv) John K. Abraham Vs. Simon C.Abraham and Anr. (John K.Abraham)4
(v) K.Subramani Vs. K.Damodara Naidu (K.Subramani)5
(vi) Basalingappa Vs. Mudibasappa (Basalingappa)6
Heard elaborate arguments of both sides and perused the record.
1 2003 SCC(Cri) 161 2 2007 (12) SCC 714 3 2009 Crl.L.J 3777 4 2014(2) SCC 236 5 2015 (1) Crimies (SC) 48 6 2019(5)SCC 418
CRL.A NO.405 OF 2018 8 15. Having regard to the fact that the cheque in question belongs to accused, drawn on his account maintained with his banker and it bears his signature, presumption under Section 139 of the N.I Act is operating in favour of the complainant, placing the initial burden on the accused to prove that the cheque was not issued towards repayment of any debt or liability and on the other hand to establish the circumstances in which the cheque has reached the hands of the complainant.
However, in John K.Abraham Vs. Simon C. Abraham & Anr (John K.Abraham)7, the Hon'ble Supreme Court held that in order to draw presumption under Sections 118 and 139 of N.I Act, the burden lies on the complainant to show that:
(i) She had the requisite funds for advancing the sum of money/loan in question to accused.
(ii) The issuance of cheque by accused in support of repayment of money advanced was true and
7 (2014) 2 SCC 236
CRL.A NO.405 OF 2018 9 (iii) The accused was bound to make payment as had been agreed while issuing cheque in favour of the complainant.
In Tedhi Singh Vs Narayan Das Mahant (Tedhi Singh)8, the Hon'ble Supreme Court held that where the accused has failed to send reply to the legal notice, challenging the financial capacity of the complainant or in the reply notice has not challenged the financial capacity of the complainant, at the first instance, complainant need not prove his financial capacity. However, at the trial if the financial capacity of complainant is challenged, then it is for the complainant to prove the same.
In APS Forex vs Shakti International Fashion Linkers Pvt. Ltd (APS Forex)9, the Hon'ble Supreme Court held that when accused raises issue of financial capacity of complainant, in support of his probable defence, despite presumption operating in favour of complainant regarding legally enforceable debt under Section 139 of N.I. Act, onus shifts again on the
8 2022 SCC OnLine SC 302 9 (2020) 12 SCC 724
CRL.A NO.405 OF 2018 10 complainant to prove his financial capacity by leading evidence, more particularly when it is a case of giving loan by cash and thereafter issue of cheque.
In Vijay Vs. Laxman and Anr (Vijay)10, K.Subramani Vs. K.Damadara Naidu (K.Subramani)11 and K.Prakashan Vs. P.K.Surenderan (K.Prakashan)12, also the Hon'ble Supreme Court held that the presumption under Section 139 of N.I. Act, is a rebuttable presumption and when accused rebut the same by preponderance of probabilities, it is for the complainant to prove his case beyond reasonable doubt including the financial capacity.
Similarly, in Basalingappa, referred to supra the Hon’ble Supreme Court reiterated that the presumption under Section 139 of N.I Act is a rebuttable presumption and initial burden is on the accused to rebut the presumption after which the burden would shift on the complainant to prove his case.
10 (2013) 3 SCC 86 11 (2015) 1 SCC 99
12 (2008) 1 SCC 258
CRL.A NO.405 OF 2018 11
Keeping the ratio in the above decisions in mind, it is necessary to examine whether the complainant has proved that in the first week of May 2013 he had the capacity to advance Rs.7.5 lakhs to the accused and the subject cheque was issued by the accused towards repayment of the same. On the other hand, it is for the accused to establish by preponderance of probability that he issued two blank signed cheques, including the subject cheque to Peddappa Reddy in connection with purchase of a lorry and after the death of Peddappa Reddy, utilising the said cheques, the present complaint and another complaint was filed against him and there was never a loan transaction between him and complainant.
According to the complaint averments, accused requested for hand loan of Rs.7.5 lakhs in the second week of April 2013 and complainant paid the said sum in the first week of May 2013. In order to prove the source, the complainant has deposed that, earlier he was having three lorry and getting income by way of transportation charges. He is also having two premises which he rented
CRL.A NO.405 OF 2018 12 out and gets income of Rs.20,000 per month. In order to prove that he has paid a sum of Rs.7.5 lakhs to the accused, the complainant has relied upon Ex.P9 statement of his account. As per this document, on 10.04.2013, he has received loan of Rs.5 lakhs from Janatha Co-operative Bank. He has withdrawn Rs.4 lakhs on 02.05.2013 and Rs.3,25,000/- on 03.05.2013. Though not stated in specific terms, by producing this document, the complainant has indirectly claimed that this sum was paid to the accused by way of hand loan.
According to the complainant, in the second week of April itself, the accused had requested for hand loan of Rs.7.5 lakhs and he has withdrawn the said sum on second and third of May 2013 in order to pay to the accused. Nothing prevented the complainant from transferring the said amount to the account of accused instead of withdrawing cash and paying the same and thereby incurring the risk of establishing the same. Moreover, it does not appeal to reason that complainant would borrow money from the Co-operative Bank on
CRL.A NO.405 OF 2018 13 interest and pay the same to the accused without any interest. It is the definite case of complainant that accused had promised to repay the amount within 10 days. If at all the accused was in a position to repay the amount within 10 days, what was the urgency for him to borrow such huge amount. If really, he wants to get substantial amount from elsewhere within a period of 10 days, he could have very well waited for 10 more days.
During his cross-examination, the complainant has stated that he paid the amount in question to the accused at his residence and at that time, his wife was present in the house. However, he is not ready to examine her. Similarly, the complainant has taken a specific defence that the portion of amount in question was received by him from several contractors to whom he had supplied building material. In unequivocal terms, complainant has deposed that he is not ready to examine them.
On the other hand, during the course of evidence, the accused has reitreated that the subject
CRL.A NO.405 OF 2018 14 cheque and another cheque was given by him blank to Peddappa Reddy in connection with purchase of a lorry. He has produced the B- Register Extract at Ex.D5. He has also produced the copy of the FIR and charge sheet regarding the accident involving the said lorry at Ex.D6 and 7. The accused has also produced account extract of his wife to show that he had advanced a sum of Rs.3 lakhs to the complainant at the time of marriage of his daughter, which fact is admitted by the complainant. The accused has also produced his account extract at Ex.D9 to show that he has borrowed loan from the bank for construction purpose and as per this document, during 2014 in all a sum of Rs.35 lakhs is credited to his account by way of loan.
It is the definite case of the accused that the subject cheque and another cheque were issued blank by him. Except his signatures, the rest of the contents were blank. On the other hand, the complainant has claimed that when the subject cheque was given to him by the accused, it was completely filled. However, the subject
CRL.A NO.405 OF 2018 15 cheque clearly indicate that the signature of the accused and rest of the writing are in different ink and handwriting. Even though a blank signed cheque also attract the presumption under Section 139 of the N.I Act, when the accused has taken up a specific defence that, it was given blank to somebody else and utilised by the accused, the difference in the handwriting and ink assumes importance.
This aspect is considered by the Hon’ble Supreme Court in C Antony, referred to supra wherein it is held that when complainant claimed that the entire document is in the handwriting of accused, these differences would certainly affect credibility of his case. In the present case also, the accused has specifically contented that he had issued signed blank cheque and therefore difference in the writing with the signature of accused and also the ink used would corroborate with the defence taken by him.
In John K. John referred to supra, while examining the conduct of the complainant in not getting
CRL.A NO.405 OF 2018 16 supporting documents for the alleged loan granted, the Hon’ble Supreme Court held that it is not the conduct of a prudent man. In the present case also, the complainant has not chosen to get any supporting documents. At least he could have been safe by paying the loan amount through account transfer, especially when he has withdrawn the amount from his account for the purpose of handing over the same to the accused.
Similarly, in Sanjay Mishra, referred to supra the Hon’ble Supreme Court took exception to the conduct of the complainant in not showing the fact of advancing hand loan to the accused in his Income tax returns. In the present case also, the complainant has not chosen to show the hand loan of Rs.7.5 lakhs allegedly given to the accused in his income tax return which would have helped to prove his case.
The trial Court without examining the oral and documentary evidence placed on record in right perspective and only on the basis of withdraw of amount from the account of the complainant has come to the
CRL.A NO.405 OF 2018 17 conclusion that he has proved the loan transaction. However, it has failed to appreciate the defence taken by the accused in the light of evidence led by him. The findings of the trial Court are contrary to the evidence placed on record and therefore perverse. However, the Sessions Court on re-appreciation of the evidence placed on record has come to a correct conclusion that the accused has successfully rebutted presumption under Section 139 of N.I Act and on the other hand, the complainant has failed to prove the allegations against accused beyond reasonable doubt and acquitted him.
On the re-appreciation of the entire material placed on record, this Court finds no justifiable grounds to interfere with the findings of the Session Court. In the result, the appeal fails and accordingly the following: ORDER (i) Appeal filed by the complainant under Section 378(4) of Cr.P.C. is dismissed. (ii) The impugned judgment and order dated 01.01.2018 in Crl.A.No.464/2016 on the
CRL.A NO.405 OF 2018 18 file of LXII Addl.City Civil and Sessions Court, Bengaluru, acquitting the accused, by reversing the judgment and order dated 15.03.2016 in C.C.No.2836/2014 on the file of XIII ACMM, Bengaluru, is confirmed. (iii) The Registry is directed to send back the trial Court as well as Sessions Court records along with copy of this judgment forthwith.
Sd/- JUDGE